Wednesday, January 11, 2012

Taxes - by Frederick Bastiat

III - Taxes

Have you ever chanced to hear it said “There
is no better investment than taxes. Only see what a number of families
it maintains, and consider how it reacts on industry; it is an inexhaustible
stream, it is life itself.”
In order-to combat this doctrine, I must refer to my preceding refutation.
Political economy knew well enough that its arguments were not so amusing
that it could be said of them, repetitions please. It has, therefore, turned
the proverb to its own use, well convinced that, in its mouth. repetitions
teach.
The advantages which officials advocate are those which are seen. The
benefit which accrues to the providers is still that which is seen. This
blinds all eyes.
But the disadvantages which the tax-payers have to get rid of are those
which are not seen. And the injury which results from it to the providers,
is still that which is not seen, although this ought to be self-evident.
When an official spends for his own profit an extra hundred sous, it
implies that a tax-payer spends for his profit a hundred sous less. But
the expense of the official is seen, because the act is performed, while
that of the tax-payer is not seen, because, alas! he is prevented from
performing it.
You compare the nation, perhaps, to a parched tract of land, and the
tax to a fertilizing rain. Be it so. But you ought also to ask yourself
where are the sources of this rain and whether it is not the tax itself
which draws away the moisture from the ground and dries it up?
Again, you ought to ask yourself whether it is possible that the soil
can receive as much of this precious water by rain as it loses by evaporation?
There is one thing very certain, that when James B. counts out a hundred
sous for the tax-gatherer, he receives nothing in return. Afterwards, when
an official spends these hundred sous and returns them to James B., it
is for an equal value of corn or labour. The final result is a loss to
James B. of five francs.
It is very true that often, perhaps very often, the official performs
for James B. an equivalent service. In this case there is no loss on either
side; there is merely in exchange. Therefore, my arguments do not at all
apply to useful functionaries. All I say is, -if you wish to create an
office, prove its utility. Show that its value to James B., by the services
which it performs for him, is equal to what it costs him. But, apart from
this intrinsic utility, do not bring forward as an argument the benefit
which it confers upon the official, his family, and his providers; do not
assert that it encourages labour.
When James B. gives a hundred pence to a Government officer, for a really
useful service, it is exactly the same as when he gives a hundred sous
to a shoemaker for a pair of shoes.
But when James B. gives a hundred sous to a Government officer, and
receives nothing for them unless it be annoyances, he might as well give
them to a thief. It is nonsense to say that the Government officer will
spend these hundred sous to the great profit of national labour; the thief
would do the same; and so would James B., if he had not been stopped on
the road by the extra -legal parasite, nor by the lawful sponger.
Let us accustom ourselves, then, to avoid judging of things by what
is seen only, but to judge of them by that which is not seen.
Last year I was on the Committee of Finance, for under the constituency
the members of the opposition were not systematically excluded from all
the Commissions: in that the constituency acted wisely. We have heard M.
Thiers say -“I have passed my life in opposing the legitimist party,
and the priest party. Since the common danger has brought us together,
now that I associate with them and know them, and now that we speak face
to face, I have found out that they are not the monsters I used to imagine
them.”
Yes, distrust is exaggerated, hatred is fostered among parties who never
mix; and if the majority would allow the minority to be present at the
Commissions, it would perhaps be discovered that the ideas of the different
sides are not so far removed from each other, and, above all, that their
intentions are not so perverse as is supposed. However, last year I was
on the Committee -of Finance. Every time that one of our colleagues spoke
of fixing at a moderate figure the maintenance of the President of the
Republic, that of the ministers, and of the ambassadors, it was answered-
“For the good of the service, it is necessary to surround certain
offices with splendour and dignity, as a means of attracting men of merit
to them. A vast number of unfortunate persons apply to the President of
the Republic, and it would be placing him in a very painful position to
oblige him to be constantly refusing them. A certain style in the ministerial
saloons is a part of the machinery of constitutional Governments.”
Although such arguments may be controverted, they certainly deserve
a serious examination. They are based upon the public interest, whether
rightly estimated or not; and as far as I am concerned, I have much more
respect for them than many of our Catos have, who are actuated by a narrow
spirit of parsimony or of jealousy.
But what revolts the economical part of my conscience, and makes me
blush for the intellectual resources of my country, is when this absurd
relic of feudalism is brought forward, which it constantly is, and it is
favourably received too:-
“Besides, the luxury of great Government officers encourages the
arts, industry, and labour. The head of the State and his ministers cannot
give banquets and soirees without causing life to circulate through all
the veins of the social body. To reduce their means, would starve Parisian
industry, and consequently that of the whole nation.”
I must beg you, gentlemen, to pay some little regard to arithmetic,
at least; and not to say before the National Assembly in France, lest to
its shame it should agree with you, that an addition gives a different
sum, according to whether it is added up from the bottom to the top, or
from the top to the bottom of the column.
For instance, I want to agree with a drainer to make a trench in my
field for a hundred sous. Just as we have concluded our arrangement, the
tax-gatherer comes, takes my hundred sous, and sends them to the Minister
of the Interior; my bargain is at end, but the Minister will have another
dish added to his table. Upon what ground will you dare to affirm that
this official expense helps the national industry? Do you not see, that
in this there is only a reversing of satisfaction and labour? A Minister
has his table better covered, it is true, but it is just as true that an
agriculturist has his field worse drained. A Parisian tavern-keeper has
gained a hundred sous,I grant you; but then you must grant me that a drainer
has been prevented from gaining five francs. It all comes to this, -that
the official and the tavern-keeper being satisfied, is that which is seen;
the field undrained, and the drainer deprived of his job, is that which
is not seen. Dear me! how much trouble there is in proving that two and
two make four; and if you succeed in proving it, it is said, “the
thing is so plain it is quite tiresome,” and they vote as if you had
proved nothing at all.